Substantive lack of internal control has been the problems in the survival and development process of China’s enterprises, the2008financial crisis has fully exposed the defects. In order to solve the problems, China has successively promulgated a series of laws and regulations to regulate the internal control. Because of his late start, China’s internal control system has not yet formed a unified theoretical basis, and still remains in the process of policies and regulations. In practice, our internal control system in general is still in its initial stage, to illustrate:the business managers did not pay enough attention on internal control, internal control weakness, and serious distortion of accounting information. In this context, it is of great importance to study on whether the depth of internal control is better for thevalue growth and long-term development or not, so that we can establish a rational, efficient internal control system.At present, the value maximization has become the business goals, and so do internal controls. This article tries to study on the relationship between internal control and corporate value. Firstly, we review the relevant literature related to the definition of the concept of internal control, internal control effectiveness and value. After analyzing the meaning of enterprise value, we know that the enterprise value is equal to the present value of cash flows, so that you can find out the influencing factors of enterprise value; such as cash flow and discount rate. Then we analyze the relationship between internal control and corporate value at the basis of the principal-agent theory, risk theory and value perspective. Then we may find how can internal control influence corporate value by risk , value management. First from management perspective, value management is based on value maximization as the goal, while internal control is to achieve its business objectives, improve work efficiency and quality, to ensure the integrity of its assets. Although value management and internal control have their own focus, the final goal is to ensure the company’s business policy and strategic objectives; the ultimate goal is to achieve the maximization of enterprise value. Secondly, from a risk perspective, the risk is the motivation of internal control, its main purpose is to save a lot of frivolous claims cost, easy to control risk to enhance the value of the company. The mechanism of enterprise risk management to enhance corporate value through three channels:optimize the allocation of capital to efficient activities, reduce the costs of financial distress, reducing the probability of corporate bankruptcies, and strengthen the incentive for management to further improve performance, reduce agency costs. The article measure the effectiveness of internal control from five perspectives:the control environment, risk assessment, control activities, information and communication, supervision. All these five elements are related to enterprise value. After analyzing on the between the effectiveness of internal control and corporate value and combining the COSO internal framework and the specific situation, we build the internal evaluation index system of listed companies in China. Through the use of actual data to conduct empirical research, we find that internal control plays a really highly positive role in promoting enterprise value, showing a strengthening trend year by year with the deepening of reform and standardization of the stock market.The innovation of this paper is being divided into the overall effectiveness of internal control level and elements level. At the macro level, we find the overall effectiveness of internal control and corporate value are significantly positively correlated, indicating that the higher the effectiveness of internal control, the larger the corporate value. At the micro level, the effectives of elements and corporate value are closely related, activities, information and communication, supervision are both significant positive correlated to corporate value, indicating that the more effective of control activities, the more effective of information and communication, the more effective of supervision, the higher corporate value. While the of environment, risk assessment and corporate value are different, this may be due to these two elements have not yet been recognized by the market or bad quantify factors such as cause, it also requires further study. In general, the effectives of internal control and corporate value are positive correlated and the trend is strengthening year by year, with the deepening of reform and standardization of the securities market.
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